Man sentenced on conspiracy, embezzlement and tax charges

Wednesday

May 22, 2013 at 10:12 AMMay 22, 2013 at 10:14 AM

PORTLAND, Maine — United States Attorney Thomas E. Delahanty II announced that Thomas Nelson, formerly the chief executive officer of York County Community Action Corporation (YCCAC), was sentenced Tuesday in United States District Court by Judge Nancy Torresen to 2½ years in prison and 3 years of supervised release for conspiracy, embezzlement from a federally funded program, tax evasion and signing false tax returns.

Nelson was also ordered to pay $1,345,793 in restitution. Nelson pleaded guilty to the charges on July 31, 2012.

YCCAC provides social service, health, and educational programs to York County individuals and families living in poverty. From 2006 to 2010, YCCAC received in excess of $30,000,000 in federal funds to be used for those purposes. Court records reveal that from 2005 to 2010, Nelson diverted $413,000 in YCCAC funds to a consulting company that had only submitted one invoice for $8,700. In exchange for the fraudulent payments, the consulting company paid more than $20,000 of Nelson’s personal expenses, including his home mortgage and also kicked cash back to Nelson.

From 2004 to 2009, Nelson also diverted more than $400,000 in YCCAC funds to a defunct nonprofit entity, New England Community Action Agency (NECAA), and recorded those payments as donations or consulting expenses. When NECAA was operating, Nelson was its treasurer. After transferring these funds to NECAA, Nelson used these funds to pay personal credit card and home mortgage bills and to gamble.

In all, Nelson admitted embezzling approximately $900,000 from YCCAC between 2004 and 2010.

From 2005 to 2010, Nelson also failed to report to the Internal Revenue Service (“IRS”) over $400,000 in embezzled income. Finally, in 2006 and 2007, Nelson prepared and signed NECAA tax returns which suggested the agency had revenue and assets, when, in fact, it did not.

The case was investigated by the IRS — Criminal Investigation, and the Office of Inspector General for the departments of Transportation, Health and Human Services, Housing and Urban Development, and Agriculture.